Is Trustmark Corp (NASDAQ:TRMK) a buy here? Hedge funds are taking a bullish view. The number of bullish hedge fund bets moved up by 3 in recent months.
According to most traders, hedge funds are viewed as underperforming, old financial vehicles of years past. While there are over 8000 funds in operation at the moment, we choose to focus on the masters of this group, around 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their highest performing picks, we have deciphered a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as important, bullish insider trading activity is a second way to break down the stock market universe. Just as you’d expect, there are a number of incentives for an insider to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).
Keeping this in mind, it’s important to take a gander at the latest action surrounding Trustmark Corp (NASDAQ:TRMK).
What does the smart money think about Trustmark Corp (NASDAQ:TRMK)?
In preparation for this year, a total of 5 of the hedge funds we track were long in this stock, a change of 150% from the third quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in Trustmark Corp (NASDAQ:TRMK), worth close to $2 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, established the largest position in Trustmark Corp (NASDAQ:TRMK). Renaissance Technologies had 2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.8 million position during the quarter. The only other fund with a new position in the stock is D. E. Shaw’s D E Shaw.
What have insiders been doing with Trustmark Corp (NASDAQ:TRMK)?
Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past six months. Over the last 180-day time frame, Trustmark Corp (NASDAQ:TRMK) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Trustmark Corp (NASDAQ:TRMK). These stocks are IBERIABANK Corporation (NASDAQ:IBKC), EverBank Financial Corp (NYSE:EVER), BancorpSouth, Inc. (NYSE:BXS), Bank Of The Ozarks Inc (NASDAQ:OZRK), and F.N.B. Corp (NYSE:FNB). This group of stocks are in the regional – southeast banks industry and their market caps are closest to TRMK’s market cap.